Readers' comments

A good nudge makes doing what's in people's best interest the easy choice rather than the effortful one. Contrary to the frequent negativity in the news about pensions, research indicates that people generally do want to build up a retirement fund that will provide for them later. So in simple terms, this is progress.

However, for millions of lower paid workers, for auto-enrolment to work in their best interests reform of the state pension must be delivered. Means-testing creates perverse incentives to not save (unless you can save lots) whereas a universal benefit does not - something few have cottoned-on to in public policy debates. So the problem is not with auto-enrolment but with the state pension.

For the few that have made the most effective use of pensions tax relief and built up particularly large funds, an effective nudge (i.e. making what is in their best interests the least effortful option) means them not being auto-enrolled by default. This affects several hundred thousand people who could lose a large proportion of pension funds they have legitimately built up. The problem in this case is with auto-enrolment - these people are an exception to the rule.

NEST is frequently inaccurately represented. It is far from being the only option available to companies choosing to set up a new pension scheme for auto-enrolment and is also not necessarily the lowest cost. NEST's competitors include, for example, NOW (from Denmark) and B&CE as well as various well-known insurance companies.

It is true to say that many will struggle to save but the auto-enrolment rules make allowance for this with those on very low pay not being auto-enrolled. There are much broader issues at play such as our attitude to debt (buy now, pay later, wanting to live beyond our means) and expectations of how long we'll spend in retirement and how wealthy we want to be in retirement vs. putting our money where our mouth is to achieve it. I believe we'll have to accept a mixture of saving more *and* retiring later.

Andy9, I'm interested in your third paragraph. How will auto-enrolment cause people to lose the funds they have built up? The only thing I can think you may be referring to is the State Second Pension, but this will only be affected by State Pension reform, and not the new auto-enrolment legislation.

Some people have "protection". Since 2006 there has been a Lifetime Allowance (a limit on the size of pension fund you can accumulate in rough terms). However, some legitimately accumulated funds in excess of this amount. Hence they were allowed to register for protection from a 55% tax on funds in excess of this amount. The quid pro quo for this was that they didn't add any more contributions. (I'm skipping a few complications that basically don't matter re my point.) Autoenrolment threatens to break the protection condition (without the individual taking any deliberate action) and so exposing them to a punitive tax charge on some of their pension fund. So for them it's a bad nudge.

If it's NEST, the charges are currently an annual charge of 0.3% of the pension fund you build up plus 1.8% of each contribution that gets added. By default, your pot will be invested in the NEST Retirement Date Fund, but there are five other funds available.

If your employer's pension scheme is with another provider, the charges and number of investment options can range significantly. If the annual charge being applied to your pot is more than 1% (including any trail commission that may go to a financial advisor that help to set the scheme up), your employer may now be able to get a better deal elsewhere.